The How and The Why

In a stunning development, much to the surprise of The Shill, The Coug and LIESman, today's job report was "weaker than expected". Surprisingly, the only mouthpiece that came close to predicting the actual number was former O'Bomney hack, Austin Goonsby. What does that tell you?

So here's the deal. Though I firmly believe that political pressure sways the calculative ability of those within the BLS, it's also possible that, because we are truly in a new paradigm, the current BLS methodology is simply outdated. 

From 1982 to 2007, the U.S. economy was measured as expanding. Those who didn't have jobs often found jobs. Those who still couldn't find jobs, applied for unemployment "insurance". This transfer payment program provided some welfare to those in need of it until they could secure employment and, since the economy was "growing", most found work before the government checks ran out. And that's the key...the program has an expiration date for those on the dole. 

The current expiration date is 99 weeks. This means that anyone receiving unemployment insurance will only receive checks for about 2 years before the government cuts them off. Now, as this pertains to today's jobs number is important. You see the BLS counts those receiving checks as part of the unemployed base. As part of the calculation, when someone stops receiving checks, they are no longer considered to be unemployed. For the 25-year period of 1982-2007, this was an OK way to do things as it was statistically correct to assume that someone no longer collecting unemployment insurance had now found a job. Now, however, that's not the case.

Instead, many folks are "long-term unemployed". They lost their job and applied for unemployment insurance and, after 99 weeks, the checks stopped coming. These folks are now considered by the BLS to have found a job but have they? Maybe a few have but just because the checks ran out does not mean that you are no longer unemployed. However, to the BLS, this is exactly what it means. So, payrolls can only increase by 115,000 and the labor force participation rate can fall to 64.3% but the stated "rate of unemployment" can also fall to 8.1%. TA-DAH!!! Barack The Magnificent can again proclaim at today's press appearance that the economy is strong and he should be re-elected.

More details can be found by reading these excellent, brief summations from ZH:

http://www.zerohedge.com/news/people-not-labor-force-soar-522000-labor-force-participation-rate-lowest-1981

http://www.zerohedge.com/news/real-u-3-unemployment-rate-116

Again, many of the people not in the measured "labor force" have simply given up. Their unemployment checks have run out and the BLS simply ignores them and fails to count them as if they don't exist at all. And this is how things work in the good ole U.S.A.

Ignoring and manipulating facts and data is also how things work in the gold and silver markets. Look, here's the deal. Everything...and I mean everything...points to a bottom here that will lead to a very strong rebound, particularly in silver. But it's a little like the BLSBS. Post-MFG, we may be in all new paradigm where the only entities left trading paper metal are Cartel Monkeys and HFT WOPRs. Under those conditions, it's going to be very difficult for the metals to surge without some type of "flipping" event which causes the algos to by tilted positively instead of negatively. A sustained short squeeze that drives price back through the 200-day MA would do the trick but can we get that to happen absent news of impending QE? More importantly, will The Gold Cartel allow that to happen ​absent the imminent appearance of overt QE3 or a Cartel switch to net long?

So, just as every traditional indicator I follow screams BUY right here, in this post-MFG world we have to remain cautious. Not so much cautious from a risk perspective, just cautious from a timing and frustration perspective. 

Hang in there. Let this nonsense play out. The American economy is moribund. Europe is an economic disaster. Global demand for physical precious metal is only going to increase. Do not let the minute-by-minute, hour-by-hour shenanigans of the Comex scare you. Your silver and gold will have a higher fiat-conversion price 6 months from now. They will have a higher fiat-conversion price 12 months from now. And, if there are still traditional fiat to which you can convert 24 months from now, the price of gold and silver will be higher still.

OK, that's all for now. As I've typed, I see that we've begun to squeeze the smarty-pant shorts a bit. This is encouraging. In gold, a move abive 1650 will intensify the pressure. Silver needs to crawl back above $31 before anything other than weak hands begin to get squeezed. Keep your fingers crossed and look for a new thread after I've had an opportunity to review what should be a very interesting CoT later this afternoon.

TF

254 Comments

Abraxas's picture

Reply to bbacq post First... Freedom vs Coercion

No offense taken. 

Turd Ferguson's picture

Lousy CoT

MODERATOR

Yuck. From a CoT perspective, nothing to write home about this week.

GOLD

​The rise of OI from the bottom near 395,000 was due to some new spec longs and some new bank longs absorbed by a 15,000 increase in The Cartel short position (net short addition of nearly 11,000). Looks like The Cartel is not ready to see gold rise anytime soon.

SILVER

The drop of OI was due to everybody exiting at once. Spec longs, EE longs, EE shorts all down and the EE net short ratio expanded to 1.56:1. Again, yuck.

After the good CoTs of the past few weeks, this one is s real downer. Looks like The Cartels are not expecting, nor are they going to allow, a significant move higher anytime soon.

On that note, have a happy weekend! indecision

Abraxas's picture

Humor

Some guy called me Abrax-ass, now this is the sense of humor I like coming here for - ; I had to chuckle (sincerely)

thanks

Bobbejaan's picture

RE:- Wrong Way CME ... Actually = CUNNING BASTARDS

Quote:
Wrong Way CME
Submitted by Xeno on May 4, 2012 - 8:25pm.

Ever since the MFG debacle, it seems that the folks at the CME just can't think straight. I guess that's what a corp. policy of CYA does to ones brains.

CME members win 90-day reprieve from higher margin rules
http://www.reuters.com/article/2012/05/04/us-cme-margin-idUSBRE84300620120504

Oh, I dunno' ... I suspect they may be thinking straighter that you give them credit for.

.

Let's see now ... IF I were a Sociopathic Vampire Entity, I MIGHT just formulate a cunning plan to :-

A) ... Spend all this week to date threatening every member/trader with Large Margin Increases as from next Monday .... Which would aid me in kicking the bejasus out of the trader's positions and dropping prices so that I can position myself to benefit me by :-

B) ... Announcing a "deferment" on Friday after-hours, so that there might be a BIG POP back up on Monday from all the relieved traders that want to re-buy the stuff they sold this week due to (A) and are now holding cash which they no longer need due to (B)

.

A Cunning Plan, indeed, Baldrick. [wink] ... I guess that's why the Vampires get Big Bucks.

Especially when I might get away with doing a "Rinse & Repeat" in 90 days time.

Bugzy's picture

Last thought for the weekend

Gold/Silver. There seems to be a fixation about price. Is it money or is it not. Yada Yada. 

Yet when folk buy it, and hold it. Something happens. Not just that it feels heavy and it is shiny. No.....

I suspect it is what it represents. A bit like the Mockingjay in the hunger games. It is a sign of freedom, of independence, of feeling ones own sovereignty return. (only slight pun intended).

It is like picking up the ball and taking it home. "If you are not going to play fair then I am taking my ball home". 

Taking the ball off those who want to bully and enslave us is a very empowering move. 

I am not buying into your system anymore, I do not trust you, you do not have my best interests at heart, I grafted all my life for these savings, I will not allow you to use them anymore, they are mine, I am taking them off you, I no longer consent to your system of broken laws, go and get fucked.

Or something like that.

Like this site. Much more than TA; Gold and Silver, much much more than its price. A statement, a line in the sand...............a raised middle finger....

Now I need to walk away from the computer. Thats it.......close the lid.....c-l-o-s-e...

Bugzy

Turd Ferguson's picture

I've always thought that

MODERATOR

I've always thought that Louise Yamada was the best technician on the planet. Heed her words:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/4_Yamada_-_Gold_%26_Silver_at_Critical_Points_in_This_Cycle.html

¤'s picture

Dismal CoT numbers

Sounds like more of the same then for a bit longer unless something breaks in the marketplace(EU) or geo-politically.

No matter how frustrating it might seem on some levels I hope it stays down for a bit longer because someday it won't be at these low prices when we look back on this time period. We'll wish we had $30-ish silver and $1600-ish gold to stack in the future.

We're all in it for the long haul and I'm a patient person. Buy the metal while you can at this price when you can do so. 

Have a good weekend TF!

I Run Bartertown's picture

I Like 'Em

I gotta confess, I'm a bit taken aback at the power/worry given to trolls. Sometimes, I think the accusation is just wrong, but even when it's right - so what? Some are funny to let people beat on. Others are dim enough to reinforce for us that we are right. Tell me, if a Tabberto or an EricO, or someone you respect (sorry, I just missed 100 of you), gives an insightful analysis...and some random asshat chimes in with an unsubstantiated (they never are), impolite (or the fake-polite concern tone they try), or drive-by (and refuse to engage) post...does that not even further reinforce your conviction? Who is so unsure of themselves that they take the naysaying as something more than incorrect (at best) or misinformation.

People suggesting a mob-ban or gangbang-delete function? WTF? What better tool could a Cass Sunstein want? There are certain types of posts that I find annoying (not the same ones that get complained about, though) but I don't think it's my place to do anything more than Ignore with the button (I never do), ignore the old fashioned way (I often do), or, occasionally, savage them and hear the lamentations of their {porn collection} (trolls don't have women). On the flip side, I have NO doubt that much of what I post, and enjoy reading from others, would get 'disappeared' by a mob-delete. PC thoughtlock is rampant in our society. 

Anyway, I picked my bottom at about 6:15 AM this morning. I'm pleased with the timing. I went with British Sovereigns. If Elizabeth MUST be on so many gold coins, at least I might get the late 1800's version when she was only middle-aged.

Desert Fox's picture

Re: Lousy COT #'s

With last week's numbers looking so good and not much to show for it this week {price wise} maybe next week will be a barn-burner. {love an underdog}

bbacq's picture

@50sQuiff: Attack on Xty et al, or the argument?

I quote you fully, interspersed with my argument:

Xty, your 'circle the wagons' mentality is downright creepy and...

I can't know exactly what you mean by that analogy, but this is a site about preparing for the end of the Great Keynesian Experiment, a very grand circling of wagons indeed.  Turd I'm sure feels free to agree or not.  Yeah, it's pretty creepy being forced to think about big change like this.  Would that it were not so...

if anyone needs 'calling out', it's you for your unthinking bullshit and bluster.

Focus on the argument, not the arguer.  I do not find the content of Xty's posts creepy, nor full of bullshit and bluster.  I cannot say that of all posters, and discretion is required.  I do see frustration, though.

I'm going on holiday to Turkey this summer. To eat and travel in Turkey I will have to buy Turkish Lira - a currency that has hyperinflated three times in recent history.  

No more examples of fiat failure are required, but thanks.

How many more examples do I need to give, to prove that currency can be separated from long-term real value?

See above.  You would have to elaborate on "currency can separate from long-term real value" if you want it to mean anything other than fiat leads to hyperinflation as in your Turkish example.

You might also note that as a consequence, the Turks have one of the highest gold savings rates in the world.

The Turks are not fools, and are working around the coercive imposition of fiat as best they can by ditching Lira for gold.  Good for the Turks!  I wish more folk already thought the same way, but fiat's failure elsewhere is more reserved -  so we have not learned as have our Turkish friends.

This is our future.

No.  I and a growing informed contingent of society think not.  I seek stable currency for both transactions and savings, as it precludes fiscal irresponsibility and ensures efficient market operation.  I believe the market in general seeks the same thing.  We are observing the market speak now as it writhes in agony under the torture of coercive manipulation.  This is not a world I desire.  The market does not desire it either and will reject it.

Obviously this has some uncomfortable implications for you. If currency can being [sic] separated from savings vehicle [sic],

It has uncomfortable implications for all of us.  If currency is separated from the savings vehicle, it means that coercive monetary forces are at work.

then it could be gold that outperforms silver, because it's more efficient for the market to choose one medium.

The market decides all currencies' relative values.  Gold might outperform silver.  I agree that a single currency is most efficient.  That's why I want just one, one that is as stable as possible.  I think Turks want the same thing.

Note: I am not a troll

I believe it is the collective consciousness of the board-borg that decides that.  Not you.

and I am still very bullish on silver.

Good for you.  Do you mean as measured in fiat dollars, euros, gold, or Turkish Lira?

Second, I find it funny that such rugged individualists insist daddy government and the bankers club together to create a gold standard to protect them,

Um, this is a doozy, 'Quiff.  Rugged individualists, okaay, perhaps justifiable, but I think I speak for many here in not wanting anything of daddy gov other than moral application of the rule of law and nothing of the central bankers other than that they go away.

when a free gold market can do a much better job for the savers without crushing the debtors.

A free and transparent gold market is a fine thing, when one is forced to use fiat currency.  Wish we had one.  Better yet is when currency is simply redeemable in gold, with no single coercive monetary authority holding the whole bag, and the size of issuers strictly limited.  Then the whole problem solves itself, just as the market solves the problem of how to build a pencil, not Man.  That said, I can't make out what you could possibly mean by this statement, unless it is that by preserving fiat, debtors can continue to be irresponsible.  It is the market's job to crush irresponsible debtors, and we deny it this control at our peril.

This is a tired old saw.  Yes, we can coercively force alternative currencies on ourselves through our governments by submitting to the insanity of central banking. 

Why would we want to? 

You are welcome to try and advance that case (instead of slandering ideas, individuals, and whole classes of people) but it won't stand to scrutiny, I assure you.

Do you actually have a particular point that you are trying to make here, 50sQuiff?  I am happy to discuss it with you, but let's keep it civil.

bbacq

boatman's picture

magpie

if you don't want to wait 3 DAYS to clear a SALE[to buy again] after u push the sell button, u must have a MARGIN trading account.

even if u do not want to buy on margin.

in a margin account, the stock is held in a STREET NAME....[some day or in some bad circumstances, this would be shakey].

not your name or your brokers.

this was how it was explained to me at TDAmeritrade by EXTREMELY knowledgeable[head guy in large regional office, face to face] people.

so if you can wait the 3 days to settle SO YOU CAN BUY SOMETHING AGAIN, you don't need a margin account.

Big L's picture

Dr G, I will sell the silver

I was just having a little fun there.

I miss the smiley faces BTW, hope they return someday.

Bobbejaan's picture

@Pining

Quote:
An excellent try, sir! However, this was in quotes, clearly indicating I did not "say" this myself, but was quoting the words of another. A mercury dime for effort, though!

Damn!!! .... You spotted the Fatal Flaw in my Cunning Plan. Well done Baldrick! [wink]

Quote:
edit- You made me laugh! Really, PM me an address or PO box if you want, I would happily pay up.

Ooh, no, guv'nor! ... I was only jesting, guv', and praise from an erstwhile Gent such as yourself is ample payment for a lowly peasant like me, Squire. [Doff the Hat I'm not wearing]

.

.

.

.

.

Please DON'T send "Billy Goat GruXty" to beat me up or throw me off the bridge, guv ... I'll be a good little peasant from from now on sir, I promise, honest. [cross fingers behind back]

Katie Rose's picture

What has happened to this site??????

OK, I've been gone about a month or so. It has been a terrible month here on the farm. Crisis of every kind, including WILD BLUE internet down most of the time.

So now I am only bottle feeding three baby goats three times a day, WILD BLUE is back up and running, and I eagerly come to Turdville.

But it is no longer the Turdville I once knew.

It used to have some of the most intelligent, informative content anywhere on the web. I felt challenged every time I came here. Folks disagreed respectfully. We didn't "call each other out." We didn't unleash our claws. Those that did were shown the door by the moderators.

I am deeply saddened by what is happening here.

I don't give a rip if there are trolls. What I don't like are pages and pages of squabbling, pointing the finger, spitting and clawing at one another.

I can scroll. I can use the ignore button.

I simply don't have time to go through pages and pages of the *$#!! that is happening here now.

I really hope that those of you who challenged and stretched the rest of us intellectually will not go away. I value you all very much.

Now back to work on the farm....

And pirate girl, would you please, please stop calling everyone out????? It just keeps the fighting going. If we ignore them, they will go away.

Thank you!

Turd Ferguson's picture

Amen, Katie Rose

MODERATOR

The main problem I have is the thread hijacking by the whole "Who is a Troll" conversation.

Please just IGNORE those you distrust. I will do the same.

Stock_Canines's picture

Yamada

I am now thoroughly confused. On Tuesday, Turd wrote that "1625 - 1635 is your floor now and much higher prices are coming very soon" and on Thursday, Turd wrote "silver isn't going to $20. Its not going to $25, either". However, just now he linked to Yamada's analysis who he called one of the best technicians in the world, and she says "a  break of 1,600 and the uptrend line would suggest further risk toward 1,500 or lower". She also states silver "could revert down toward the lower channel line and critical support near 25". 

Her analysis seems to suggest risk is rising and further downside moves are becoming more likely. That flies in the face with Turd's comments this week. I guess no one knows what is going to happen, but posting a link to a highly respective technician that makes statements that are diametrically opposed to your own analysis is, while  honest, is also curious. Turd, why are you convinced the silver is not going to 25 and gold should see much higher prices very soon? More and more seem to be joining the camp that suggest we could easily see some more significant  downward move in prices. 

Xty's picture

Hate to be a spoil sport

I think I said it:

Reply to: The How and The

ReachWest - thank you by Xty

4 hours 59 min ago

I am not crazy - I don't want them banned, but I want them called out.   And they are not always new faces - smart enough to hang around and appear kind of friendly - forum visits, etc.

This really is a battle against the banks - they have convinced an entire generation that 'currency' can be separated from value - just look at victor's arguments.  York Rite thinks it is stupid to own silver - why?  why does he want to make you feel stupid for owning it?  I know I am preaching m...

Xty's picture

Sorry Turd

Night night

bbacq's picture

@50sQuiff

Xty: "One in which the banks get the gold, and you get the 'money'."

I think that was a joke, but only funny because of its truth.

50sQuiff: What are you talking about? The banks are getting digital money from CBs whilst we're stacking physical gold.

True.  Banks also own gold and trade it for their customers as well.  So what?

To implement a gold standard the banks would be the ones getting the gold,

You will have to slow down, and be specific about what you mean by "gold standard".  There are variations.  Which banks would get what gold and from whom?

whilst we have to trust their paper receipts (which never keep pace with the true value of physical gold).

No.  Not true.  In a diverse, non-coercive, gold-backed currency regime, the notes are independently issued. Each issuer's notes are valued by the market based on its observation of all possible information.  If a bank is irresponsible its notes will be redeemed by the market, and the problem of bank irresponsibility (and note devaluation) is addressed by market arbitrage.  Your statement only applies in a regime of irredeemability and coercion, which is all I expect most reading this have ever experienced.  My notes used to say "Pay to the bearer on demand" until the system fell prey to the centralists.

You get everything completely bass-ackwards.

Puh-lease!  A simple request, if anyone or anything here be accused of that, I ask that it...

bbacq's words.  ;-)

Turd Ferguson's picture

No need to apologize, Xty

MODERATOR

Your work in defending the integrity of the site has been commendable and appreciated. Note your current position on the Hat Tip Leaderboard.

Its probably best now for all of us to move on.

Response to: Sorry Turd
Eric Original's picture

Ignore List

The Ignore List is a good idea.  

Like I always say, "If it's worth doing, it's worth overdoing".  Maybe that's why I have 73 people on mine.  :D

Patriot Family's picture

Yamada vs. TF - They're two different technicians

Stock_Canines, I don't think you can hold Yamada and Turd accountable to the same standard.  Yamada's work is excellent, but it is pure technical analysis.  I can't speak for TF, but it seems to me his assumptions are based on a good mix of TA, watching direct and ancillary market drivers and gut instinct.  For lack of better words, IMO he is trying to aggregate the big picture.  Two very different approaches.  I think he's only posting Yamada's note here to give additional perspective.

The Doc's picture

"Civilized People Don't Buy Gold'

You wanna see the definition of a troll?
Berkshire's Vice Chairman Charlie Munger was on CNBS today...when asked about his thoughts on gold, the prick said, and I quote directly: "gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939 but civilized people don't buy gold"

I'm not even Jewish and I am fired up! Keep up the amazing work Turd, when the establishment has to compare those who own gold to pre-holocaust Jews and state that civilized people don't buy gold, clearly our efforts at educating the general public are gaining traction, and the elite are pissing their pants. 

Howard Buffett is rolling in his grave somewhere in Nebraska.

http://www.silverdoctors.com/berkshires-charlie-munger-gold-is-for-1930s-jews-civilized-people-dont-buy-gold/
 

I Run Bartertown's picture

What's really Fked is

that we have a confessed socialist on board who acknowledged dodging taxes on his bullion buys. 

That's hypocrisy worthy of banning from the planet, but I still wouldn't want to see him go (since he's non-US - US leftists must FOAD). How could I ever better illustrate my primary thesis that leftists are selfish, control-freak hypocrites not fit to live amongst decent folk. Taxes for thee (or you hate the poor), no taxes for me (we.are.the 99%.). Nice enough guy and all, but what could I EVER do to illustrate their thinking better than they do themselves?

It's like when an OathKeeper or even Tea Party type wants Abe Foxman at the ADL gone for defaming them. Why? A creepy critter like that is a wonderful enemy to have. His replacement might not so blatantly ooze arrogance, religious-supremacy, and disdain for America. A foil, used properly, is a beautiful thing. The uglier the better.

Eric Original's picture

new thread

new thread

foxtrot's picture

Thank You Katie Rose

Thank you for being a lovely sane human.  Your comment is golden!!

murphy's picture

EO

EO said:

The Ignore List is a good idea.  

Like I always say, "If it's worth doing, it's worth overdoing".  Maybe that's why I have 73 people on mine.

Well said. Maybe we need a new counter next to the hat tip one to track the amount of IU's we all have. I have 23 and most of them are long gone from here.

edit: last!!

and I mean it Xty

maravich44's picture

...Hi Eric Original......mis-underapreciated,,,

,,,,you are.  This guy kinda rock's it constantly and is taken for granted (I am guilty also)  If you read his forums and insight, please pop him a tip, he is well worth it. .... PS  I have no vested interest in EO, but I do authorize this message..  Maravich44..///

Number 47's picture

@I run Bartertown

I'm afraid my social streak is valid right up to the point that my government starts socialising bank losses. I pay plenty other new taxes since this crisis began, enough to make your eyes water.

Being a believer in social responsibility does not make me an idiot and it does not mean I have to support the government when they are blatantly the opposite of everything they supposedly stand for.

I do understand your point though and it is taken on the chin. I suppose it is pretty hypocritical of me but I'm happy with that in a way. My circumstances are what they are.  I am not a raving socialist, I have many problems with trade unions and think civil servants are overpaid, underworked and rarely civil nor servile.

I believe in a social safety net, I also believe we could finance it better and I don't think the rich should pay any more than anyone else, but I strongly believe that this is not what is happening at the moment. Just like in the US, the rich complain about taxes yet seem to pay much less than the rest of us.

I don't recognise our government, they are lackeys of the parasite bankers, if i can protect my family against this criminal heist i will do so in any way I see fit. When we are through with the fighting we can perhaps set about building the country we all desire, until then I will continue doing what I do.

We are all doing what we must to muddle through, I don't profess to have all the answers there are plusses and minuses to both sides and I hold you no ill will for calling me out, you do have a point. i do find this a bit much however.

leftists are selfish, control-freak hypocrites not fit to live amongst decent folk.

Hypocrite I may be, I counter that these are extreme times and I am under duress, the rest is quite far from the truth.

Seems to be something to this full moon this weekend, my wife is as cranky as a cat with a hard-on and i could mention this board today is barbed with venom. I hope normal service will resume soon.

No hard feelings, enjoy your posts and I am still young so I'm entitled to my socialist views for a while yet. I've heard they fade as you get older.  ;-)

maravich44's picture

..@ all...

....ain't it Great that we can come here and share ideas? (for free) All Along the WATCHTOWER is the mission. Turd ,do not let them get you down..

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